I’ve worked with a number of companies with great customer experiences, including several I have featured in this blog, ranging from retailers to healthcare companies to manufacturers. During this time I have noticed themes about how companies effectively use their brand values, strategies and missions to create a great customer experience.

Their structures vary and their approaches differ. But successful customer experience capabilities follow three steps to success. They excel at Customer Intelligence, use this to inform their Customer-Based Capabilities, and sustain all this through a Customer-Focused Culture.

Customer Intelligence

Their first step is to create Customer Intelligence. None of my clients use this phrase, but they should. The primary difference between Customer Intelligence and Voice of the Customer or Customer Insights capabilities is the attitude. Customer Intelligence is about knowing everything you can about your customers.

Average companies take a tactical approach to customer insights, running the occasional survey or focus group. Companies with a great customer experience start by learning everything about their customers they could.

These companies take Peter Drucker to heart when he said: “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

They create this Customer Intelligence by bringing their customers to life for their employees. Methods differ – some use customer panels or visit their customer sites. They create customer rooms or go “Undercover Customer” to shop their competitors. They develop personas so that customers move from being statistics to people.

Their next step is to identify the Metrics that Matter. Diligent companies don’t take for granted that the Net Promoter Score (NPS) or Satisfaction is their right metric. They first isolate which metric actually matters for their business, and study to calculate the financial impact of that metric. They can tell you that a 0.1 increase in NPS results in a 5% increase in loyalty, or that a 0.2 increase in their Customer Effort Score translates to a 2% increase in referrals.

Great companies don’t just measure satisfaction – they bring their customers alive to their staff, and study them to identify what really matters.

Customer-Based Capabilities

Capabilities are all your offerings. Not just your products or services, but your website, your call center, your sales staff – everything that touches a customer. Average companies may use research for their core offerings (and poor companies use their guts even for this), but great companies start with the customer for everything they do. They do this by understanding what really matters, and by relying on their customer-facing employees to help with the design.

Most companies do a Net Promoter Score survey and call it a day. Great companies go further, using drivers to understand what really matters. I once worked with a global pizza company focused on creating the newest food offerings. Once we did their driver analysis we learned that the secret to return visits wasn’t wowing customers with new menu items, but instead giving them a pleasant greeting when they entered. By going with their gut, this company was missing a huge opportunity to gain a slice of the market (pun fully intended). Drivers help you understand where you need to focus to improve your results.

Great companies also rely on their employees to give them great ideas. While Google may have scaled back on their 20% time, half of their products ideas came from this program, including Gmail. Amazon’s recommendations engine came from an individual contributor. Yes, front-line employees will also give you terrible ideas, which is why these companies learn to fail fast. This allows them to use the insights of their customer-facing staff to develop new ideas, and then to scale those successful ideas quickly.

Customer-Focused Culture

Lastly, while most companies separate human resources from the rest of the business, companies with a great customer experience understand that HR is the key to a sustainable customer experience strategy. They focus on employee engagement and create heroes of their customers and front-line employees.

At many companies, employee engagement is an annual fad. Managers focus on it when the yearly survey comes around, but after a month they go back to their customary way of operating. Great companies hire for customer centricity and reinforce this through continual training and focus. At great companies HR has a seat at the table – average companies (see HP here) slash their HR staff to save on costs.

And lastly, you can tell a ton about a company’s customer experience by observing who they have as heroes. I once met with the CMO for a national service company and asked him who the company’s heroes were. He replied, “I’d say it’s our CEO. We really love him.”

It’s great that they love their CEO. But it’s no surprise to me that they’re still struggling to distinguish their customer experience. What gets measured gets managed, but what gets celebrated gets repeated.

Great companies understand that real heroes deliver their customer experience every day – their call center representatives, their retail employees, their service people. They take the time to celebrate those heroes and tell stories about how they are delighting their customers.

Most companies throw together a few customer research reports for their managers, use gut thinking to decide on their capabilities, and take a passive approach to their culture.

However, those companies that rise above – those customer experience leaders – take a deliberate approach. They learn all they can about their customers and their needs and share that with the entire company. They use this knowledge to build great capabilities that truly solve customer problems. And they sustain this through a focus on culture.

Jim,
What a great post. Winning companies use a variety of strategies, but as you so eloquently explain, the key ingredient is putting the customer at the center of everything – needs, services, and orientation. It’s not a mystery that this outward focus (away from the self or company) is what determines success in both individuals and organizations. Bravo and thanks !!
Chris